KT&G, a major tobacco company, is embroiled in a massive legal battle as it faces a US$2 billion lawsuit from a former employee. The plaintiff, Kwak Dae-geun, a former researcher at KT&G, claims he was inadequately compensated for his pioneering work on what he alleges to be the world’s first heated tobacco product.
Details of the Lawsuit
The lawsuit was filed at a district court in Daejeon, where KT&G’s headquarters are located. Kwak is demanding KRW2.8 trillion (approximately US$2 billion), marking this as the largest compensation request by an individual in a legal proceeding outside of collective suits.
Background of the Invention
Kwak joined KT&G in 1991 and in 2005, he developed a prototype of a non-combustible tobacco device. His innovative journey included filing multiple patents:
- In July 2005, he submitted his initial patent for the device.
- In December 2006, he filed a patent for an upgraded product featuring an automatically-controlled heater.
- By June 2007, he patented a tobacco stick, completing a set that included a heating unit and other components.
Despite these contributions, Kwak left the company in 2010 after his proposal for further development was rejected amid company restructuring.
Claims and Allegations
Kwak contends that KT&G took over his inventions, filing patents for some technologies he developed but failed to recognize him as an employee inventor. He also argues that the company did not pursue overseas patents for his technologies, which allowed foreign competitors to capitalize on the market, leading to substantial revenue losses.
The compensation he seeks is calculated based on projected sales from his patented technology over a 20-year period, including earnings missed from not securing overseas patents and revenue lost due to unaddressed patent infringements.
Company’s Defense
KT&G maintains that it has compensated Kwak appropriately through a technology advisory agreement which he accepted without legal objections at the time. The company also asserts that Kwak’s technologies are not used in its current product lineup, stating that it had already introduced early models of heated tobacco products back in 1998.
This legal confrontation highlights significant issues regarding intellectual property rights and compensation for employee inventors within large corporations, setting a precedent for how innovative contributions are valued and rewarded in the industry.
